Walmart Q4 Earnings: The Growth of Retail Sales Might Shrink, Watched Out Valuation Risks

TradingKeyFeb 21, 2025 7:09 AM

TradingKey - Walmart (WMT) Q4 earnings report and next year guidance review:

1、Q4 Revenue: Revenue for the fourth quarter was $180.6 billion, exceeding previous market expectations by $1.6 billion, a growth of 4.2%. Non-GAAP EPS was $0.66, slightly above market expectations. However, due to the lower-than-expected guidance for 2026, the stock price fell by 6.54% to $93.28. Walmart's revenue maintained good growth mainly due to diversified income sources, seasonal sales opportunities, improved delivery speed and services, and growth in Sam's Club membership income.

2、Q4 Highlights: Online revenue grew by 16%, significantly contributed by Sam's Club membership income. This is also related to the company's increased capital expenditure strategy in recent years, especially in continuous capital investment in product design and model optimization. Online sales, excluding fuel sales (Ex fuel), saw a year-on-year increase of about 2% in both price and volume. The share of online purchases by high-income households is also increasing. In terms of pricing, inflation factors reflected a year-on-year increase of approximately 70 basis points. The share of customers choosing expedited delivery is also growing, indicating that the large retailer's delivery services and customer convenience have further improved, thereby promoting business performance.

3、Advertising Revenue Growth: Advertising revenue grew by 24%. This business refers to comprehensive digital advertising revenue on Walmart's website, app, physical stores, and related channels. After acquiring VIZIO at the end of 2024, it is expected that Walmart's advertising revenue will further increase this year through VIZIO's smart TVs and system channels.

4、2026 Fiscal Year Outlook: The midpoint of revenue guidance is below market expectations. Despite a 13% increase in stock dividends, the market stock price still defensively fell yesterday. From the perspective of the overall retail industry, although the announced holiday consumption growth rate at the end of 2024 was 3.8%, higher than 3.1% in 2023, the actual overall retail industry consumption trend is showing a phased deceleration. Walmart will inevitably be affected by the overall negative impact of the industry, including competitive pressures from Amazon and Costco, which need continuous attention. The company's stock price rose by 80% in 2024, recently reaching the highest position in 52 weeks (PE over 40X). We believe the valuation risk is currently quite high.

Disclaimer: The content of this article solely represents the author's personal opinions and does not reflect the official stance of Tradingkey. It should not be considered as investment advice. The article is intended for reference purposes only, and readers should not base any investment decisions solely on its content. Tradingkey bears no responsibility for any trading outcomes resulting from reliance on this article. Furthermore, Tradingkey cannot guarantee the accuracy of the article's content. Before making any investment decisions, it is advisable to consult an independent financial advisor to fully understand the associated risks.

Popular Instruments

Recommended Articles

[Reuters Analysis] Rosy US earnings vista doesn't match gloomy growth outlook: McGeever

ORLANDO, Florida, March 25 (Reuters) - U.S. economic growth is set to slow this year, perhaps significantly, but no one seems to have told Wall Street. While equity prices and valuations have tailed off recently, analysts are still expecting record-high profits.

Congressional Stock Trades: Unlock the Wealth Code of U.S. Politicians on Capitol Hill

TradingKey - In the U.S. capital markets, beyond the savvy strategists at major institutions like Goldman Sachs, Morgan Stanley, and JPMorgan, a group of U.S. Congress members has investors’ attention with their market acumen and performance — earning them the nickname "Congressional Stock Gods."

[IN-DEPTH ANALYSIS] AppLovin: The Secret to Explosive Growth Through AI and Acquisitions

Through key acquisitions (MAX, Adjust, MoPub), AppLovin evolved from a mobile game ad platform to an industry-wide platform, expanding its technology, user base, and market reach.

[IN-DEPTH ANALYSIS] CrowdStrike (CRWD): The Train is Missed, Waiting for Another Dip

Unfortunately, after the post-outage rally, the share price of CrowdStrike already seems well-priced, even if we price a rather optimistic growth trajectory and margin expansion for the coming five years.

[IN-DEPTH ANALYSIS] Affirm: Will the End of Partnership with Walmart Impact Its Fundamentals?

With a 27% profit margin, $22.6B liquidity, and expected profitability by Q4 2025, Affirm is solid, though Walmart’s exit and competition impact its target price at $43/share.